J and E Vanjak Pty Ltd v Palmer Street Developments Pty Ltd - [2019] QSC 103

SUPREME COURT OF QUEENSLAND

CITATION:

J & E Vanjak Pty Ltd v Palmer Street Developments Pty Ltd & Anor [2019] QSC 103

PARTIES:

J & E Vanjak Pty Ltd ACN 158 539 943

(applicant)

v
Palmer Street Development Pty Ltd ACN 003 146 174

(first respondent)

and

Mitchell Herrett and Frank Lopilato (as the administrators of the Deed of Company Arrangement)
(second respondents)

FILE NO/S:

TS No 605 of 2018

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Townsville

DELIVERED ON:

24 April 2019

DELIVERED AT:

Brisbane

HEARING DATE:

11 and 19 September 2018; Further submissions received 18 December 2018 and 14 February 2019.

JUDGE:

Brown J

ORDER:

1. The applicant pay the costs of the second respondents of the application on a standard basis.

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – PARTIES AND NON-PARTIES – where the sole director and shareholder of the applicant, Ms Huang, appeared on behalf of the applicant – where the applicant was ultimately unsuccessful –whether the Court should exercise its discretion to award costs against Ms Huang personally

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – INDEMNITY COSTS - whether indemnity costs should be awarded against the applicant and Ms Huang

Knight v FP Special Assets Ltd & Ors (1992) 174 CLR 178, applied
TheBeach Retreat Pty Ltd v Mooloolaba Marina Ltd (2009) 2 Qd R 356, applied
FPM Constructions Pty Ltd v Council of the City of Blue Mountains [2005] NSWCA 340, cited
Plante & Anor v James [2011] QCA 109, cited

COUNSEL:

Ms Huang (by leave, self-represented) for the applicant
Mr Parton (by leave, self-represented) for the first respondent
D Forbes for the second respondents

SOLICITORS:

Ms Huang (by leave, self-represented) for the applicant
Mr Parton (by leave, self-represented) for the first respondent
Thomson Geer for the second respondents

Judgment in this matter was handed down on 7 December 2018. At that hearing Ms Huang appeared on behalf of the applicant. Submissions for costs were provided on 18 December 2018 by the second respondents and on approximately 14 February 2019 by the applicant and Ms Huang (insofar as costs were sought against her personally). The delay arose as a result of Ms Huang, the applicant’s representative, being away overseas.
The second respondents submit that they should be awarded their costs to be paid by both the applicant and Ms Huang personally jointly and severally. They also seek that their costs be paid on an indemnity basis. Ms Huang contends that the costs should not be paid by the applicant or Ms Huang because the administrators did not pay for their legal costs, costs agreements have not been disclosed by the second respondents, the applicant has not been paid under the DOCA and the applicant has appealed. She contends the applicant is not insolvent and can satisfy a costs order. She also challenges the amount of costs said to have been incurred by the second respondents. She…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Keep reading for free

Create a free CaseChat account to read J and E Vanjak Pty Ltd v Palmer Street Developments Pty Ltd and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2019] QSC 103
Decision Date: 24 April 2019

CaseChat Overview and Summary

The case of J and E Vanjak Pty Ltd v Palmer Street Developments Pty Ltd involved a dispute where the applicant, Vanjak, was ultimately unsuccessful in their application. The primary issue before the court was whether the Court should exercise its discretion to award costs against Ms Huang, the sole director and shareholder of the applicant who appeared on behalf of the applicant. The second issue was whether indemnity costs should be awarded against the applicant and Ms Huang personally.

The court found that costs usually follow the event, and in this case, the applicant was not successful. The court noted that the fact the applicant was not legally represented did not protect Ms Huang from indemnity costs if the circumstances warranted it. The court also dismissed Vanjak’s attempts to impugn the judgment or raise further evidence, finding these matters irrelevant to the determination of the appropriate costs order. The court held that Vanjak should pay the costs of the second respondents on a standard basis. As for the possibility of extending the costs order to Ms Huang personally, the court recognised that its discretion extends to awarding costs against non-parties under certain conditions, such as where the non-party has played an active part in the litigation, has an interest in the subject matter of the litigation, and the party is insolvent, and if the interests of justice favour such an order. However, the court concluded that non-party costs orders are exceptional and that directors of companies will not be subject to them merely for promoting the company’s interests in litigation.

The court ordered that Vanjak pay the costs of the second respondents of the application on a standard basis. The court did not make any order extending the costs to Ms Huang personally.

Orders

Orders of the court

1. The applicant pay the costs of the second respondents of the application on a standard basis.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

The second respondents also seek to rely on serious and scandalous allegations including of fraud made by the applicant through Ms Huang in relation to the second respondents’ conduct of the administration and recommendation of the DOCA,[1] which the Court found were unsubstantiated and in some cases unsupported by any evidence. The second respondents submit that the fact that the applicant was not legally represented does not protect Ms Huang from indemnity costs if the circumstances of the case otherwise warrant it.[2] That of course is accepted.[1] Second Respondents’ submissions, [15].[2] du Boulay v Worrell& Ors [2009] QCA 63 at [69].Consideration The applicant was not successful and its application was dismissed. Costs usually follow the event and should do so in this case. None of the matters raised on behalf of Vanjak support a contrary costs order. Vanjak seeks to raise matters to impugn the judgment or raise further evidence in relation to the substance of the application in light of further financial statements for Palmer Street Developments Pty Ltd prepared by the second respondents up until 7 December 2018. Those matters are not relevant for this Court to consider in relation to the question of costs. Vanjak also asserts that legal costs of the second respondents have been paid by the applicant by reference to those financial statements. That is not in fact substantiated by those financial statements. While there is reference to legal costs being paid to Thomson Geer they are a considerably smaller amount than those Mr Herrett has estimated have been incurred in relation to this application and are likely connected to the finalisation of the administration. Challenges as to the amount of the costs incurred and attempts to seek disclosure of documents are irrelevant to the determination of the appropriate costs order. Those are matters which may be relevant in the context of any taxation of costs. As to the applicant not being paid the dividend under the DOCA, this again is not relevant to the question of the appropriate costs order to be made in the context of this application. Vanjak should pay the costs of the second respondents of the application. As to whether any costs order should extend to Ms Huang personally, the Court’s discretion does extend to awarding costs against a non-party. The second respondent referred to the High Court decision of Knight v FP Special Assets, which held that where a non-party (in that case, receivers) has played an active part in the conduct of the litigation, the non-party or some person on whose behalf he or she is acting or by whom he or she has been appointed has an interest in the subject of the litigation, and the party is insolvent, the non-party may be ordered to pay costs if the interests of justice favour such an order.[3] The approach with respect to non-party costs orders was conveniently summarised by Martin J in TheBeach Retreat Pty Ltd v Mooloolaba Marina Ltd.[4] In particular, his Honour noted that “a court will ordinarily not make a non-party costs order unless the interests of justice justify a departure from the general rule that only parties to proceedings are subject to costs orders”.[5] His Honour referred at [42] to the New South Wales Court of Appeal decision FPM Constructions Pty Ltd v Council of the City of Blue Mountains,[6] which summarises the relevant principles which have been applied where costs orders have been made against non-parties. As is correctly acknowledged by the second respondents, non-party costs orders are exceptional and directors of companies will not be subject to them simply because they have promoted the company’s interests in litigation.[7] [3] Knight v FP Special Assets Ltd & Ors (1992) 174 CLR 178 at 193.[4] (2009) 2 Qd R 356 at [38]. [5] (2009) 2 Qd R 356 at [38].[6] [2005] NSWCA 340 at 210. [7] Plante & Anor v James [2011] QCA 109 at [4].

CITATION:	J & E Vanjak Pty Ltd v Palmer Street Developments Pty Ltd & Anor [2019] QSC 103
PARTIES:	J & E Vanjak Pty Ltd ACN 158 539 943 (applicant) v Palmer Street Development Pty Ltd ACN 003 146 174 (first respondent) and Mitchell Herrett and Frank Lopilato (as the administrators of the Deed of Company Arrangement) (second respondents)
FILE NO/S:	TS No 605 of 2018
DIVISION:	Trial Division
PROCEEDING:	Application
ORIGINATING COURT:	Supreme Court at Townsville
DELIVERED ON:	24 April 2019
DELIVERED AT:	Brisbane
HEARING DATE:	11 and 19 September 2018; Further submissions received 18 December 2018 and 14 February 2019.
JUDGE:	Brown J
ORDER:	1. The applicant pay the costs of the second respondents of the application on a standard basis.
CATCHWORDS:	PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – PARTIES AND NON-PARTIES – where the sole director and shareholder of the applicant, Ms Huang, appeared on behalf of the applicant – where the applicant was ultimately unsuccessful –whether the Court should exercise its discretion to award costs against Ms Huang personally PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – INDEMNITY COSTS - whether indemnity costs should be awarded against the applicant and Ms Huang Knight v FP Special Assets Ltd & Ors (1992) 174 CLR 178, applied TheBeach Retreat Pty Ltd v Mooloolaba Marina Ltd (2009) 2 Qd R 356, applied FPM Constructions Pty Ltd v Council of the City of Blue Mountains [2005] NSWCA 340, cited Plante & Anor v James [2011] QCA 109, cited
COUNSEL:	Ms Huang (by leave, self-represented) for the applicant Mr Parton (by leave, self-represented) for the first respondent D Forbes for the second respondents
SOLICITORS:	Ms Huang (by leave, self-represented) for the applicant Mr Parton (by leave, self-represented) for the first respondent Thomson Geer for the second respondents